246 F.

2d 776

Herbert L. GOLDMAN, Administrator of the Estate of Esther

B.
Goldman, Appellant,
v.
Marion B. FOLSOM, Secretary of Health, Education and
Welfare.
No. 12088.

United States Court of Appeals Third Circuit.

Argued March 19, 1957.
Decided July 2, 1957.

Jerome L. Markovitz, Philadelphia, Pa. (S. Robert Levant, Markovitz,

Stern & Shusterman, Philadelphia, Pa., on the brief), for appellant.
Norman C. Henss, Asst. U.S. Atty., Philadelphia, Pa., (W. Wilson White,
U.S. Atty., Philadelphia, Pa., on the brief), for appellee.
Before McLAUGHLIN, KALODNER and HASTIE, Circuit Judges.
KALODNER, Circuit Judge.

Was there substantial evidence to support the finding of a Social Security

Administration referee that a claimant for Old Age Insurance benefits had not
been employed as claimed?

That issue is presented on this appeal from the Order of the District Court for
the Eastern District of Pennsylvania granting the motion of the defendant
Secretary of Health, Education and Welfare ('Secretary') for summary
judgment. In granting the Secretary's motion, the District Court affirmed the
final decision of the Social Security Administration that Mrs. Esther Goldman 1
('claimant') was not an employee of certain corporations owned by her son and
did not receive the wages from those corporations which were required to make
her eligible for old-age insurance benefits under the Social Security Act.2

The facts may be summarized as follows:

3

On June 18, 1953, claimant, then aged seventy, filed an application for old-age
insurance benefits with the Bureau of Old-Age and Survivors Insurance of the
Social Security Administration ('Bureau'). In that application she stated that she
had been employed by Charles Murray, Inc., Sandro, Inc., and Regency
Clothes, Inc. from October, 1951 until March, 1953. Subsequently, on July 2,
1953, claimant was awarded old-age insurance benefits of $65.00 monthly
which were paid to her for the period beginning April, 1953, and continuing
through January, 1954.

Payments to claimant were terminated effective February, 1954. The Bureau

made its determination that she had acquired no quarters of coverage by reason
of the fact that she had not been employed nor had she received wages as she
had claimed in her application. The Bureau's determination was based on a
report made by its field representative, F. W. Brobyn that claimant had advised
him when he called on her on February 18, 1954 that she had not been
employed since the 1930's. Thereafter claimant requested and received a
hearing before a referee of the Social Security Administration on July 25, 1955,
and an adjourned hearing on August 5, 1955. She did not appear personally at
these hearings because of her physical condition but was represented by her
attorney.

At the July 25th hearing, Dr. Morris Elkin, claimant's physician, Herbert L.
Goldman, her son and an officer of the corporations which employed her,
Ronald Berman, her former fellow-employee and Jesse Ianni, her long-time
friend, testified in claimant's behalf. Affidavit of a certified public accountant
and four onetime fellow employees of claimant, as to her employment, were
also adduced.

Brobyn testified with respect to his investigation and a statement of June 25,
1954, which he had obtained from the claimant.

At the further hearing on August 5, 1955, Florence Polk, one of the two
attesting witnesses to the June 25, 1954, statement, appeared and testified,
pursuant to the referee's subpoena. The second attesting witness, Ida Lessner,
could not be found.

On September 29, 1955, the referee rendered his decision affirming the
Bureau's determination as to the claimant's non-eligibility to benefits on the
specific finding that '* * * claimant was not an employee of the three

corporations, and did not receive a wage or salary from these corporations.
Claimant had no quarters of coverage and was not entitled to old-age insurance
benefits.'
9

The request of the claimant for review of the referee's decision was denied on
December 28, 1955, by the Appeals Council of the Social Security
Administration and it then became a final decision within the meaning of the
Social Security Act. Suit for review was then instituted in the District Court
which, as earlier stated, granted the Secretary's motion for summary judgment,
resulting in the instant appeal.

10

Section 205(g) of the Social Security Act, as amended3 provides:

11

'* * * The findings of the Administrator4 as to any fact, if supported by

substantial evidence, shall be conclusive * * *.'

12

By virtue of the provisions of the section cited as well as the Administrative

Procedure Act5 we are charged with the duty of ascertaining whether on the
record as a whole there is substantial evidence to support the Secretary's
findings of fact.6 Ferenz v. Folsom, 3 Ctr., 1956, 237 F.2d 46.

13

In discharging that duty we must keep in mind, as adjured by the Supreme

Court, that 'courts must now assume more responsibility for the reasonableness
and fairness' of decisions of federal agencies 'than some courts have shown in
the past' and 'Reviewing courts must be influenced by a feeling that they are not
to abdicate the conventional judicial function.' Universal Camera Corp. v.
National Labor Relations Board, 1951, 340 U.S. 474, 490, 71 S.Ct. 456, 466, 95
L.Ed. 456.

14

The Secretary concedes that the referee relied upon an oral statement given by
the claimant to Brobyn on February 18, 1954, and the signed statement of June
25, 19577 that she had been physically incapacitated during the years of her
alleged employment in 1951, 1952 and 1953 and that she had never worked for
the corporations in question.

15

It is clear that the referee based his finding that the claimant was mentally
competent at the time she made these statements solely on Brobyn's opinion
testimony to that effect.

16

On that score, Brobyn's testimony disclosed that he was the claimant on but

two occasions-- one on February 18, 1954, when he first interviewed her and
again on June 25, 1954, when he took her written statement. The first interview
took 'in excess of one hour' and the second probably 45 minutes'. (P. 86
Transcript of Record.) He observed no 'evidence of mental confusion' on the
claimant's part.
17

Brobyn admitted that he did not interrogate any of the three doctors whose
names were supplied to him as having treated the claimant. While he did
interview her employer's son, he did not check employees as to whether
claimant had actually been employed.

18

In behalf of the claimant, Dr. Elkin testified on direct examination that she had
been his patient intermittently for about 12 years; 'in 1951 she was all right
except that she had minor attacks of hypertension, nervousness' and 'other than
that she was all right'; that she was employed at his suggestion because he
thought it might alleviate her nervous condition; that he knew she had worked
for Charles Murray, Inc. and Regency Clothes; that about a year and a half
later, which would be about March, 1953, he advised her to stop work because
she was 'beginning to have lapses of memory; beginning to get fidgety,
nervous, stubborn.'

19

Herbert L. Goldman, the claimant's son, president of the three corporations

which employed her, testified that in 1950 and 1951 there was 'a lot of
shrinkage in inventory, and merchandise was being stolen out of the store'; that
while the fellow who stole the goods was arrested and convicted, there was
only partial reimbursement for the loss by the bonding company; that on the
advice of Dr. Elkin that his mother would be better off if she were occupied, he
employed her at a salary of $75.00 a week 'to watch pilferage'; she would also
occasionally answer the phone, sort sales slips, watch the cash register and
make herself generally helpful; in March 1953, she ceased employment on the
advice of Dr. Elkin; subsequently her condition worsened and in the summer of
1954 she became 'abnormal'; 'she was physically sick and mentally sick'; that at
the time of the hearings she was in a convalescent home because she was
unable to take care of herself.

20

Ianni, claimant's long-time friend, testified that he was her frequently at work
between October, 1951 and March, 1953; that in 1954 she stopped work
because 'she was confused-- she was beginning personally to slip.'

21

Ronald Berman testified that while attending college he was a part-time

employee of Charles Murray, Inc. and Regency Clothes, in 1951 and 1952 (the

clothing stores operated by the two concerns were situated about a half block
from one another); that claimant was a fellow employee-- 'she was watching the
store; watching the help; when people came in sometimes she waited on trade,
answered the telephone, etc.; that when he stopped work around Christmas
1952, she was still employed.
22

Affidavits to similar effect were adduced in testimony of the following fellow

employees of claimant: James H. Smith, Helene Schuman, James Rochester and
Hyman Snyder. David R. Gettlin, a certified public accountant who audited the
accounts of the Goldman corporation submitted an affidavit that he saw the
claimant at work from time to time and that she was on the payroll.

23

The referee while noting the testimony and affidavits of the claimant's five
fellow-employees as to her employment chose to ignore them as part of the
evidential scene despite their disinterested character.

24

He ignored too, the testimony of the claimant's physician that she was mentally
incompetent at the time she gave Brobyn the June 25, 1954 statement and chose
instead to accept the 'opinion' of mental competency of a layman, Brobyn, who
had spent only 45 minutes with the claimant on that date and who had only
observed her for an hour or so four months earlier.

25

The referee also chose to accept the hearsay testimony of Brobyn that Florence
Polk who had witnessed the June 25th statement had stated at the time that she
'knew' the contents of the statement to be true despite the fact that Mrs. Polk
testified that she was not present at the time the statement was given, that she
was not aware of its contents and most significantly that she had not been
employed by the claimant and did not know her during the 1951-53 claimantemployment period. Moreover, the referee on the score of mental
incompetency, failed to note Mrs. Polk's testimony that the claimant didn't
seem to know what she was doing at times in June, 1954 and 'she didn't know
too much about her affairs'; 'her memory was very well' and her 'condition
gradually got worse.'

26

In view of the foregoing we are of the opinion that the fact-finding of the
referee was without substantial basis and that the District Court erred in finding
to the contrary.

27

For the reasons stated the Order of the District Court will be reversed and the
cause remanded to proceed in accordance with this opinion.

28

HASTIE, Circuit Judge (dissenting).

29

I dissent because I think there was substantial and adequate evidentiary basis
for the administrative finding that the social security claimant, Mrs. Goldman,
was not employed at the times relevant to this controversy. It was, therefore,
the duty of the district court to find, as it did, for the defendant below, and it is
our duty to affirm the judgment of the district court.

30

The majority opinion seems to recognize that the oral statement and subsequent
formal and witnessed certification by Mrs. Goldman, that she had been
physically incapacitated in 1951, 1952 and 1953 and had never worked for the
employers named in her social security claim, are explicit admissions against
interest on the critical issue of the case and, therefore, a very substantial kind or
evidence.

31

To escape from the necessity of recognizing these admissions as an adequate

basis for the administrative finding, the court reasons that it was arbitrary for
the referee who conducted the administrative hearing to reject 'the testimony of
the claimant's physician that she was mentally incompetent at the time she gave
Brobyn the June, 25, 1954 statement (the above mentioned admission) and * *
* instead to accept the 'opinion' of mental competency of a layman, Brobyn
who had spent only 45 minutes with the claimant on that date and who had only
observed her for an hour or so four months earlier.'

32

But there was more to the administrator's position than this conflict between the
opinion of a doctor and the opinion of a layman. The referee points out that
Mrs. Goldman herself was the moving party in the proceeding before him less
than a year after the admission in question. She had signed an affidavit dated
December 27, 1954, stating that she had been employed during periods in
question. She took the same position in the formal request for a hearing before
a referee which she executed March 29, 1955. In substance, she was asking the
referee to believe that in February and June of 1954 senility resulting from
cerebral arteriosclerosis had already made her so incompetent that no credence
could be given to her oral and written statements, yet, a few months later, in
December of 1954 and thereafter, she was competent to make an affidavit of
evidentiary value, and to assert her administrative claim as a mentally
competent person. In these circumstances, the referee quite reasonably had this
to say: 'If Mrs. Goldman is not now mentally competent to press her claim
herein, it ought to be pressed by a person on behalf of an incompetent. But if
she is now mentally competent, the burden is certainly on her to explain these
statements. As the matter stands, Mrs. Goldman pursues an equivocal course;

her statements are not denied or explained by her, but her own attorney seeks to
impeach them, by attacking her competency, motive, truthfulness, and by the
presentation of contradicting witnesses.'
33

This inconsistent position continued after the referee's decision. Mrs. Goldman
herself signed a petition for administrative review of the referee's decision on
October 21, 1955. She supported that by a signed statement, asserting in so
many words 'that she worked for the period aforementioned and the statement
in 1954 obtained by Brobyn was obtained at a time, as the evidence so
indicated, she was senile and unable to comprehend any conversation.' The
administrative officers who decided this case were not willing to accept the
picture Mrs. Goldman thus gave of herself as competent for gainful
employment in 1953, too senile to know what she said and signed in 1954, and
again competent to execute credible affidavits and operative legal papers in
1955. I think this court is mistaken in now requiring them to accomplish this
feat of reconciling the apparently unreconcilable.

34

Of course, Mrs. Goldman may have been incompetent in 1954. If so, it is

hardly less likely that she was too senile to work in 1953, and that a pro forma
employment status was maintained in an effort to give her eligibility for social
security benefits. These uncertainties merely serve to emphasize that the referee
and the Secretary on administrative appeal had ample basis for deciding this
case either way. Therefore, a court should not interfere.

35

I am not concerned that the estate of Mrs. Goldman will get a modest sum in a
doubtful case. I am concerned, however, that with so many controversies like
this continually requiring administrative decision, this court embarks upon a
course of substituting judicial for administrative judgment in doubtful
situations.

Esther Goldman died on December 2, 1955. Her son, Herbert L. Goldman,

brought this action as administrator of her estate

42 U.S.C.A. 402(a) et seq

Id. 405(g)

All functions of the Federal Security Administrator were transferred to the

Secretary of Health, Education and Welfare by Section 5 of the 1953
Reorganization Plan No. 1, effective April 11, 1953, 18 Fed.Reg. 2053, 67 Stat.
631, 5 U.S.C.A. following section 133z-15

5 U.S.C.A. 1001 et seq

Since the capital appeals Council of the Social Security Administration denied
review of the decision of the referee his findings of fact became the findings of
fact of the Secretary under 205(g) of the Act

'Understanding that this statement is for the use of the Bureau of Old-Age and
Survivors Insurance, I hereby certify that-'I have not been employed during the past four years. During this period I have
been confined to my home at 323 S. 6th Street, Phila. Pa. by my physical
condition. My friend, Ida Lessner, who visits me almost daily can confirm this
as can also my cleaning woman, Florence Polk, who has worked for me for the
past four years. My last employment was as a saleslady at Gimbels Dept. Store
in Phila. This was about 1932.
'Knowing that anyone who makes a false statement or misrepresents in
connection with Federal Old-Age and survivors insurance benefits is
committing a crime punishable under Federal law, I certify that the above
statements are true.
's) Mrs. Esther Goldman '323 S. 6th St. 'Phila. Pa. '6-25-54
'Witnesses: 'Florence Polk
'1620 Fitzwater St. Phila. 'Ida Lessner '506 S. 5th St. Phila.'